FxWirePro: AUD/USD edges higher to test 0.72 handle, Aussie buoyed on renewed US-China trade optimism

AUD/USD chart on Trading View used for analysis

• AUD/USD grinds higher to test 0.72 handle as the Australian dollar remains buoyed on renewed US-China trade optimism.
   
• The US Treasury Secretary Steven Mnuchin told reporters that Chinese Vice Premier Liu will most likely visit the US later this month for higher-level trade negotiations.
   
• AUD/USD is trading 0.24% higher on the day at 0400 GMT. Intraday bias higher.
   
• Momentum studies ar bullish, but daily cloud is capping upside. Break above cloud base could see further gains.
   
• Scope then for test of 0.7335 (converged 200-DMA and trendline resistance). 
   
• Rejection at cloud with break below 21-EMA support could see resumption of weakness.
   
• Focus on US inflation data due later today for further impetus. Analysts expect headline and core CPI to be unchanged. 
   
• Stable inflation is likely to support new Fed rate caution, lowering the odds for a first half  rate hike, weighing on the dollar and adding upside support to the major.

Support levels - 0.7169 (5-DMA), 0.7133 (21-EMA)

Resistance levels - 0.7207 (cloud base), 0.7335 (converged 200-DMA and trendline resistance)

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